Dec 20, 2013

Escalating Rental Prices Becoming A Cost-Burden to Half of All Renters

Rental housing in the United States is increasingly becoming less affordable, but the number of renters keeps on growing. This is mainly a result of higher standards for loan qualification, as well as demographic shifts.

More than half of all renters, (20.6 million, as estimated by Al Jazeera) are spending more than 30% of their total income on their rent, while one quarter of renters, (11.3 million, as estimated By Al Jazeera) are spending more than 50% of their total income on their rent. Because of these escalating rental prices, one in every two renters is cost-burdened.

For the very low income, finding adequate housing is a challenge. The national average rent in the United States, as reported by Meyers Research, averaged $1,092 in the third quarter of 2013. This increase is 1.6% higher than the second quarter, and 4.9% higher than last year, which shows the price of rental housing continues to climb.

The median monthly rent has remained higher than $1,000 for the past seven consecutive quarters, and continues to rise throughout the United States. Less than 5% of rentals in 2011 were under $400 a month. While there are rental assistance programs in place, such as the Housing Choice Voucher Program or Section 8, recent budget cuts which have only helped to intensify the issue of unaffordable housing.

The amounts of renters are growing for all age groups, and in the next 10 years, these numbers are projected to grow by at least 4 million people. To fix the damage done by budget cuts and escalating rental prices, the market will need to adapt to ensure the newfound spread of renters is able to find sufficient housing.